Business news in brief - Arkansas Democrat-Gazette

2 firms plan to raise output in oil basin

DALLAS -- The fracking boom is gaining speed in the Permian Basin of west Texas and New Mexico, as Exxon Mobil and Chevron are primed to sharply boost oil production in the next few years.

The big oil companies say advances in drilling technology mean that the Permian field can be profitable even at lower crude prices.

Exxon Mobil said Tuesday that it expects to produce the equivalent of more than 1 million barrels of oil per day in the basin as soon as 2024, up from a forecast of 600,000 barrels by 2025.

Exxon, the largest operator in the Permian, has 48 drilling rigs there and plans to raise that to 55 by year's end. The Irving, Texas-based company estimates that it is sitting on about 10 billion barrels of oil in the basin.

Chevron officials told analysts Tuesday that the company expects to produce 600,000 barrels per day in the Permian by the end of 2020 and 900,000 barrels a day by the end of 2023.

San Ramon, Calif.-based Chevron said its Permian portfolio has doubled in value over the past two years.

-- The Associated Press

Southwest CEO blames losses on union

DALLAS -- The chief executive officer of Southwest Airlines says a spike in the number of planes ruled out of service for mechanical problems is costing the carrier millions of dollars each week because of delayed and canceled flights.

Gary Kelly didn't give a precise figure Tuesday but said the financial damage prompted the airline's lawsuit last week against the Aircraft Mechanics Fraternal Association.

"The company filed suit against [the union] last week to recover those damages and prevent more from occurring," Kelly said at a JPMorgan investor conference.

Southwest said some workers are writing up minor mechanical problems and grounding planes to gain leverage in negotiations for a new labor contract.

The union didn't comment immediately. Last week, the union's national director, Bret Oestreich, said Southwest produced no evidence that any mechanical write-ups were improper.

-- The Associated Press

FCC ends probe into Sinclair conduct

WASHINGTON -- The U.S. Federal Communications Commission ended an inquiry into whether Sinclair Broadcast Group Inc. misled the agency during a failed merger bid last year, but the agency said it may consider the allegations against the broadcaster in future matters.

Sinclair won dismissal of the proceeding before the agency's administrative law judge, who in a Tuesday order posted online said a hearing now would be an "academic exercise" because the deal, for Tribune Media Co., was no longer being considered.

Sinclair shares rose $1.33, or 3.6 percent, to $38.07.

The agency had asked the judge to examine "alleged deception" that was "ostensibly aimed at allowing Sinclair to bypass the commission's multiple ownership limitations."

"Allegations that Sinclair engaged in misrepresentation and/or lacked candor before the Commission are extremely serious charges that reasonably warrant a thorough examination," the judge said in the order.

Sinclair's proposed $3.9 billion purchase of Tribune stations collapsed amid acrimony last year after the FCC sent the matter to the administrative law judge for a hearing to consider whether Sinclair misled the agency. At issue was ownership of stations in Chicago and Texas as Sinclair sought to remain under size limits for broadcasters.

-- Bloomberg News

Papa John's, founder reach settlement

LOUISVILLE, Ky. -- Papa John's has reached a settlement agreement with founder John Schnatter that will see him step down from the company's board.

The agreement comes after more than a year of tussling between the Louisville-based pizza chain and Schnatter, who made a series of racially insensitive remarks that led to calls to boycott the company.

Schnatter stepped down as chief executive in late 2017 and resigned as chairman in July after facing backlash for blaming disappointing sales on NFL player protests and for using a racial slur during a company conference call.

Under the settlement, Schnatter and the board will mutually agree on an independent director who will replace Schnatter on the company's nine-member board. If a new director isn't named by the company's annual shareholders meeting on April 30, then Schnatter's term will expire at the meeting, according to a regulatory filing.

Papa John's International Inc. will remove a provision of a "poison pill" plan adopted in July 2018 that restricted Schnatter's ability to communicate with other shareholders. Schnatter still owns 31 percent of the company's shares.

-- The Associated Press

Agency approves copper-mine project

TUCSON, Ariz. -- The U.S. Army Corps of Engineers said it will issue a permit authorizing construction of a $2 billion copper mine in southern Arizona by a Canadian company.

The Tohono O'odham, Pascua Yaqui and Hopi tribes oppose the project over concerns it would damage ancestral homelands.

An attorney for the tribes has requested further consultation with the U.S. Environmental Protection Agency before construction starts.

The Arizona Daily Star reports that the Corps of Engineers said Monday that it will approve the Rosemont Mine southeast of Tucson.

Hudbay Minerals Inc. of Toronto is expected to build the mine and employ more than 400 people.

Construction has been delayed by a Clean Water Act permit from the EPA that would allow dredging and filling on the property.

The agency says it is dropping further review.

-- The Associated Press

Target surpasses expectations for 4Q

NEW YORK -- Target's expanded online delivery options, new brands and updated stores helped drive shoppers to spend more during the critical holiday shopping season.

Target, which is trying to narrow the gap between itself and online leader Amazon, enjoyed a 31 percent spike in online sales in the fourth quarter. Comparable sales, which include online sales and sales at stores open at least a year, rose 5.3 percent. It was the best performance since 2004 and surpassed the 5 percent growth that industry analysts had expected, according to a survey by FactSet.

The chain's stores, which it has dedicated billions of dollars to update and modernize, also realized gains. Target recorded a 4.5 percent increase in store traffic. The company said that it's picking up market share across different areas, from fashion to toys.

The company put out a better-than-expected forecast for the year, and shares rose 4.6 percent on Tuesday.

-- The Associated Press

Business on 03/06/2019

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